I am in desperate need of some help and would soooo appreciate someone explaining this situation to me.
So my 19 year old son (who is a dependent on our income tax return), just received a 1098-T from his college that correctly shows (I'll use round numbers) 3,000 in grants/scholarship (Box 5) and $1,500 in tuition (Box 1). The money is box 5 that exceeds box 1 should be reported as taxable income as it is all for one calendar year (2023).
It is my understanding that in this situation, the parent can put on their tax return just the amount of grant income up to the break even point (in this case, my tax return would show $1,500 in grants and $1,500 in tuition). Then the excess would be somehow reported by my son on his tax return (he already need to file for his work at McDonalds) so the tax on the excess grants of $1,500 would be shown on HIS tax return and he would pay tax at his lower tax rate for the $1,500 excess. But this is where it gets confusing as I use my Turbo Tax program. I've seen some explanation about this but none I can make sense of.
If my example above is correct ($1,500 tuition/$1,500 grants on my return and $0 tuition/$1,500 grant on his), how do I do this? Can I enter the 1098-T amounts on my tax return as well as his tax return but somehow on another line adjust the amounts so somehow MY return shows $1,500 in tuition and grants yielding zero excess. And then make an adjustment of the same 1098-T put on his return showing no tuition and $1,500 in grants? OR, do I have to put the 1098-T on either my tax return OR his. And if only on one, how would I handle this in the Turbo Tax program on my return to show no excess grant on mine but get the excess grant amount on his?
I am really at a loss because most of what I have seen in answers on-line doesn't give me clear instructions on where in Turbo Tax to enter the amounts on the two returns to make this work. I can really use help and a clear explanation of how a parent and dependent would handle this.
